Vivo Energy Kenya has closed a multi-billion dollar deal to acquire a majority stake in Engen, the largest petroleum distributor in South Africa. Malaysia’s Petronas announced that it had agreed to sell its entire 74% interest in Engen to Vivo Energy.
“Engen has played a significant role in the Group’s business portfolio for almost three decades. Engen’s strengths and skills have remained to grow as an award-winning, customer-focused market leader in South Africa, recognizing the company’s long and illustrious 140-year heritage. While changing business goals is the reason for Petronas’ decision to take a step back and rearrange its portfolio, we fully recognize Engen’s potential and agree that this is a vital step forward to further accelerate its growth.” Petronas President and Group Chief Executive Officer Datuk Tengku Muhammad Taufik said while commenting on the agreement.
As part of the purchase agreement, Vivo Energy Group Plc further said that it would uphold and expand the Engen brand in the new markets.
According to Vivo Energy CEO Stan Mittleman, the acquisition of Engen service stations in Kenya and eight other African markets in 2019 was essential for the company’s expansion effort.
According to the CEO, if the acquisition of Engen Ltd. is successful, it will mark a significant shift in its growth.
Read: Second Richest Company In The World Enters Kenyan Market
Vivo Energy recorded a Ksh25.96 billion revenue jump in the six months that ended June 2022, brought about by an increase in fuel consumption.
As a result, the group has posted Ksh110.55 billion in revenues in the first half of the year, which is a 30.6 percent jump from the previous Ksh84.59 billion in a similar period in 2021.
As of March, Vivo Energy Kenya held a 26.52 percent share of the local petroleum sales market. As part of its expansion plans, the company hopes to open 20 fuel stations nationwide by the end of the year.
Read:Vivo Energy’s Revenues Hit Ksh110B In Six Months
While Vivo has more than 2,600 service stations spread across 23 African countries, Engen has 1,300 fuel stations spread across seven African countries.
In 1996, Petronas made its initial investment in the South African oil sector, becoming a majority shareholder two years later.
Engen’s acquisition is the second similar deal in the Kenyan petroleum sector in less than six months, following the purchase of Valvoline by Saudi Aramco, the world’s largest oil producer. The Saudi Arabia-based oil giant accounts for more than 50% of the country’s revenues.
The company is involved in both upstream and downstream segments, with the upstream exploring oil production, condensation, and production of natural gas and natural gas liquids. The downstream focuses on the generation of petrochemicals and natural gas and oil products.
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